'DOESN'T MAKE MUCH SENSE': China open source push draws skepticism

MARIA: WELCOME BACK. FUTURES INDICATING ANOTHER DECLINE AT THE START OF TRADING THIS MORNING. THE DOW INDUSTRIALS ARE DOWN 330 POINTS RIGHT NOW, TWO THIRDS OF 1%. THE NASDAQ IS LOWER BY 473, THAT'S ONE AND TWO THIRDS PERCENT LOWER AS CHIP STOCKS, SEMICONDUCTORS, AND A.I. RELATED NAMES SELL OFF THIS MORNING. ALL THREE MAJOR INDICES WERE LOWER YESTERDAY LED BY THE SELLOFF IN TECH AND SEMICONDUCTOR STOCKS IN PARTICULAR. THE NASDAQ WAS DOWN 387, THE DOW WAS DOWN 105 AT 4:00 ON WALL STREET YESTERDAY. THIS MORNING, BIG TECH TAKE A LOOK, DOWN ACROSS THE BOARD, WORST PERFORMER THIS MORNING YOU'VE GOT STOCKS LIKE AMAZON AND MICROSOFT DOWN BETTER THAN 2%. ALPHABET DROPPING BETTER THAN 4% YESTERDAY AFTER ANNOUNCING A DELAY IN THE RELEASE OF ITS NEW A.I. MODEL. AND CHIP MAKERS THIS MORNING ARE LOOKING LIKE THIS, TAKE A LOOK AT WHAT THE MAJOR CHIP MAKERS ARE DOING LIKE MICRON TECHNOLOGY FOR EXAMPLE, IT'S FLAT THIS MORNING. HOWEVER, THE WORST PERFORMER THIS MORNING IS AMD, ADVANCED MICRO DOWN 2 AND-A-HALF PERCENT AS IS NVIDIA. MICRON ACTUALLY JUST WENT POSITIVE. TIE WASN'T SEMICONDUCTOR DECLINED YESTERDAY AFTER RELEASING THE A.I. SPENDING FORECAST INCLUDING $100 BILLION ADDITIONAL TO BUILD OUT ITS U.S. BUILDOUT OF A.I. AND DATA CENTERS. SK HYNIX DECLINING, DROPPING BELOW THE IPO PRICE, THAT HAS BEEN LEADING THE SOUTH KOREAN MARKET LOWER. THIS MORNING IN THE PREMARKET, SK HYNIX IS BOUNCING, UP ALMOST 5%. JOINING ME NOW IS PRIME CAPITAL FINANCIAL CHIEF FINANCIAL OFFICER, WILL McGUFF. HOW DO YOU SEE THE MOVEMENT IN TECH AND A.I. RIGHT NOW. WHAT'S YOUR REACTION TO THE SELLOFF. >> THANKS FOR HAVING ME NON. WE'RE SEEING VOLATILITY IN THE A.I. NAMES, SPECIFICALLY THE MEMORY SEMICONDUCTORS AND I THINK IT'S JUST REALLY A PAUSE IN THE OVERALL TREND HIGHER. MARKET'S A LITTLE DISRUPTED RIGHT NOW WITH A.I. MODEL NEWS OUT OF SPOON SHOT YESTERDAY IN CHINA -- MOON SHOT YESTERDAY IN CHINA. THE DEVIL WAS IN THE DETAILS IN MY OPINION. ALL OF THE INITIAL REPORTS IS THAT THE KIWI MODEL IS AS EXPENSIVE ON A TOKEN BASIS AS THE AMERICAN MODELS WHICH I THINK IS A GOOD THING. IT SHOWS THERE'S A SUPPORTED REVENUE MODEL FOR THE LANGUAGE MODELS AND A.I. STOCKS GOING FORWARD WHICH IS GOING TO CONTINUE THE TONED OF INVESTING IN THE MEMORY AND CHIP NAMES IN MY OPINION. MARIA: YOU MENTIONED WHAT WENT ON IN CHINA OVERNIGHT. XI JINPING ENDORSED THE BUILDING OF OPEN SOURCE ARTIFICIAL INTELLIGENCE MODELS. HE'S TOUTING AN APPROACH THAT HAS HELPED THE COUNTRY CATCH UP WITH THE U.S. I WONDER IF THIS IS AN INDICATION THAT IN FACT THE U.S. IS WINNING AND CHINA IS GETTING NERVOUS HERE. HE SPOKE AT THIS A.I. CONFERENCE, CASTING CHINA AS A CHAMPION OF OPENNESS SUDDENLY. HE WANTS OPEN SOURCE TECHNOLOGY AROUND A.I., WILL. >> YEAH, DOESN'T MAKE MUCUCH SENSE WHEN YOU THINK ABOUT HOW THE CHINESE OPERATE THEIR GOVERNMENT OVER THERE, IT'S NOT VERY OPEN, LIMITED ACCESS TO INFORMATION YET THEY WANT THE A.I. LANGUAGE MODELS TO BE OPEN SOURCE. IT'S KIND OF A DOUBLE SIDED RIGHT THERE WHICH SAYS EVERYTHING THAT YOU NEED TO KNOW THAT THEY'RE BEHIND ANTHROROPIC, OPEN A.I. OR LEADING THE RACE HERE IN AMERICA WHICH IS A GOOD THING. MARIA: EXACTLY RIGHT. WHAT'S YOUR SENSE OF INFLATION AND OIL? OIL THIS MORNING IS AROUND $80 A BARREL, TAKE A LOOK AT THE PRICE OF OIL RIGHT NOW AS THE U.S. DELIVERED MORE STRIKES AGAINST IRAN OVERNIGHT, STRIKING KEY MILITARY TARGETS, COASTAL SURVEILLANCE ENERGY INFRASTRUCTURE COMMERCIAL TRAFFIC IN THE STRAIT OF HORMUZ SLOWING IN THE MEANTIME AND THE U.S. HIT BRIDGES IN IRAN, B OBVIOUSLY WE'RE STILL IN THIS, WILL. YOUR REACTION. >> IT'S A LONG GAME SCENARIO WITH THE CONFLICT IN THE MIDDLE EAST. DOESN'T SEEM LIKE THERE'S RESOLUTION IN THE SHORT-TERM. WE CAN SEE THE SENSITIVITY OF THE OIL MARKETS WITH INFLATION AND WE ACTUALLY HAD THE FIRST BACKUP OF INFLATION, SOME PEOPLE ARE SAYING IT'S DEFLATION WHICH IS MISLEADING IN MY OPINION BUT INFLATION WAS DOWN MONTH OVER MONTH FOR THE FIRST TIME SINCE COVID WHICH SHOWS THE SENSITIVITY TO OIL PRICES HAVING COME IN OVER THE LAST COUPLE OF MONTHS SO IS INFLATION GOING TO BE JUST AS SENSITIVE ON THE WAY UP AS OIL PRICES ARE 80, $85, HIGHER RIGHT NOW. IT DEPENDS ON THE HOUSING AND ALL THE OTHER COMPONENTS OF INFLATION AS TO WHETHER ENERGY OFFSETS SOME OF THE PROGRESS BEING MADE THERE AND WHAT THE FED DOES IS GOING TO BE FUN TO WATCH IN MY OPINION. MARIA: WHAT DO YOU WANT TO DO IN TERMS OF ALLOCATING CAPITAL RIGHT NOW AND WHAT ARE YOUR EXPECTING OUT OF THE FED? INTEREST RATES THIS MORNING LOOK LIKE THIS WITH DALLAS FEDERAL RESERVE PRESIDENT LORI LOGAN SAYING THEY SHOULD HIKE INTEREST RATES TO FIGHT INFLATION. THIS MORNING YIELDS ARE TRADING DOWN. THE TEN YEAR DOWN ALMOST 3 BASIS POINTS, NOW AT 4.52%. DATA ALSO LED TRADERS TO BELIEVE THAT THERE'S NO LONGER A BET ON RATE HIKES THIS MONTH. YESTERDAY MOHAMMED ELARIA SAID WE'RE NOT EXPECTING A HIKE AND WE'RE NOT EXPECTING A CUT. >> WARSH IS USING A LOT OF RHETORIC TO CONTROL THE MARKETS AND INFLATION. THE RHETORIC IS S VERY FORWARD GIBES AND THE FACT THAT HE'S GOING TO FOCUS ON INFLATION SO I DON'T SEE THE FED DOING MUCH HERE. THE ADMINISTRATION WANTS LOWER RATES SO IT'S GOING TO BE A BIT OF PRESSURE THERE FOR THEM NOT TO RAISE. INFLATION COULD PROBABLY COME IN LOOK AGO LITTLE BIT BETTER. EMPLOYMENT'S BACK ON TRACK SO REALLY THERE'S NOT MUCH REASON FOR HIM, FOR WARSH TO DO MUCH HERE ESPECIALLY AS HE'S WAITING ON THE TASK FORCES TO GET FIRED UP AND REPORT BACK TO HIM. MARIA: HOW ARE YOU ALLOCATING CAPITAL RIGHT NOW THEN, WILL? >> I THINK THAT RIGHT NOW YOU'VE GOT A REALLY GOOD BACKDROP OF EARNINGS GROWTH, GOVERNMENT SPENDING, MORE LIQUIDITY, MORE STIMULUS OUT THERE, TARIFF REFUNDS SO I WOULD USE THESE TECHNICAL PULLBACKS, LITTLE BITS OF VOLATILITY TO LOOK TO STAY INVESTED IN THE EQUITY MARKETS HERE THROUGH YEAR-END. EARNINGS GROWTH, 20 TO 25% IS AN ASTRONOMICALLY GOOD NUMBER. UNTIL WE START TO SEE EARNINGS REVISIONS COME DOWN OR FLAT LINE YOU'VE GOT TO LOOK TOWARD THE EQUITY NAMES AND TAKE ADVANTAGE OF THE VOLATILITY IN MY OPINION. MARIA: WE WILL WATCH THAT AND LEAVE IT THERE. WILL, GOOD TO SEE YOU THIS MO